Almost 1 in 3 people living in poverty have debt problems

© ANP / Patricia Rehe
Of the 540 thousand people in the Netherlands who were living in poverty in 2023, 31 percent had debt problems (according to information registered on debts). That was 163 thousand people. Meanwhile, among those living on incomes just above the poverty line (1.2 million people), debt problems were less common at 22 percent. However, this group represented a larger slice of the population: 265 thousand people. Across the population as a whole, 10 percent of people had debt problems. This is according to analysis carried out by Statistics Netherlands (CBS) which, for the first time, looked at debt problems in relation to poverty.

Rise in number of people living under or just above the poverty line with debt problems

People living below the poverty line are three times more likely than average to have debt problems, and those living just above the poverty line are twice as likely to do so. Compared to 2021, the share of people with debt problems has risen in both groups, just as it has in the population at large. The increase was slightly larger among those living just above the poverty line. This is because debt problems are common among welfare recipients (29 percent in 2023) and those became a larger proportion of those living just above the poverty line due to the energy allowance. For instance, half of welfare recipients who were living below the poverty line in 2021 were just above the poverty line in 2022 due to this effect. In the previous year the share was 30 percent.

1 in 5 people in poverty have had debt problems for three consecutive years

When a household has experienced three consecutive years of debt problems, the people in that household are classified as having long-term debt problems. Among those living in poverty, 21 percent had debt problems in 2021, 2022 and 2023. Among those living just above the poverty line, long-term debt problems were slightly less common at 16 percent.

People living in poverty are the most likely to have tax arrears

Some households are registered as having several types of debt at the same time. That is the case for half of people living just above the poverty line, and 42 percent of people living below the poverty line. Among those living in poverty who have debt problems, slightly over half had tax arrears, 40 percent were registered with the Credit Registration Agency as having payment arrears, and 40 percent had arrears on health insurance premiums. People living just above the poverty line were most likely to be registered with the Credit Registration Agency as having payment arrears (42 percent). This was followed by tax arrears (36 percent) and arrears on health insurance premiums (33 percent).

Buffer assets usually enough for three months, at most

For three-quarters of people living in poverty and the same proportion of those living just above the poverty line, the buffer assets available to their household (i.e. savings and other liquid assets) amounted to no more than 25 percent of the annual poverty threshold income in 2023. This means that most of those living in poverty and just above the poverty line would not be able to live for three months without any income. Those living in poverty, on the other hand, also have an income that is inadequate. In 2023, almost 60 percent of those living in poverty were earning up to 25 percent below the annual poverty threshold income. This means they were missing up to three months of the annual income that would be required to live at the basic level for the entire year.